Discount-instrument methods and systems

ABSTRACT

Methods and systems are provided for implementing a program of discount arrangements. Discount-arrangement information relating to discount arrangements is maintained, with each discount arrangement being associated with one of multiple merchants. Transaction information related to a transaction at a point of sale is received, with the transaction information identifying a merchant party to the transaction. An identifier for a discount instrument presented at the point of sale during the transaction is received. A determination is made whether the merchant party is one of the multiple merchants is made. Validation information is then returned to the point of sale in accordance with the determination.

CROSS REFERENCE TO RELATED APPLICATION

[0001] This application is a continuation-in-part of U.S. patentapplication Ser. No. 10/268,040, entitled “DISCOUNT-INSTRUMENT METHODSAND SYSTEMS,” filed Oct. 8, 2002 by Christopher R. McGee et al., theentire disclosure of which in herein incorporated by reference for allpurposes.

BACKGROUND OF THE INVENTION

[0002] This application relates generally to discount instruments. Morespecifically, this application relates to methods and systems forproviding discount instruments that may be used in fundraisingapplications.

[0003] There are many organizations that rely on fundraising drives orevents to finance their operations. Common examples are seen in schoolgroups, such as athletic and other types of clubs, that use fundraisingtechniques to finance the purchase of uniforms, equipment, and travel,among other expenses. These school groups may engage in fundraisingactivities regardless of their level, including elementary-school,secondary-school, and university-level groups. Moreover, fundraisingactivities are often used by other types of groups to finance theiractivities, including, for example, scouting and social organizations.While many such groups are children's groups, there are also adultgroups that rely on similar fundraising activities for financialsupport.

[0004] A persistent problem faced by fundraising organizations is theneed to find a fundraising program that is sufficiently appealing toraise the desired funds. In some instances, organizations may rely ondonations of a purely charitable nature, although it is often believedthat the fundraising is more successful when the donor acquiressomething of value in exchange. Accordingly, many fundraising drivestypically take the form of having individuals in the organization sell aproduct to customers, with the organization taking some of the profitfrom the sale. There are a wide variety of products that may be sold,common examples of which include magazine subscriptions, cookies, andcandy. While these approaches do have some success, they usually rely ona partnership between the fundraising organization and the regularproducer of the product. To accommodate the funds retained by thefundraising organization, the cost of the products may be greater to theconsumer than if they were purchased elsewhere and/or the profitprovided to the regular producer may be lower than is usual for acomparable purchase. Both of these factors act to limit the overallsuccess of the fundraising activity.

[0005] There is accordingly a need in the art for methods and systemsthat limit the negative impact of these factors.

BRIEF SUMMARY OF THE INVENTION

[0006] Embodiments of the invention thus provide for discount-instrumentmethods and systems. In some instances, the discount instruments used bysuch methods and systems may result from a fundraising activity, butthis is not a requirement. The result of such a fundraising activity isto provide customers with a discount instrument that may be used withmerchants to obtain discounts on goods and/or services. In otherinstances, customers may acquire such a discount instrument throughother means. In embodiments of the invention, the customer presents thediscount instrument to the merchant to obtain the discount. The merchantascertains whether the discount instrument is active and determines anapplicable discount to be applied to a transaction.

[0007] In a first set of embodiments, a method is provided to apply adiscount to a transaction. An identifier is extracted from a discountinstrument, such as by reading a magnetic strip on the discountinstrument, and is transmitted to a host system from a point of sale.The identifier may, for example, comprise an account number extractedfrom the discount instrument, which may be a plastic card. Thetransmission to the host system may, for example, take the form of anauthorization. A validation is received from the host system for thediscount instrument and the transaction is modified in accordance with adiscount arrangement associated with the discount instrument. Thetransaction modification may be dictated by discounting informationincluded on the discount instrument, such as in the form of a bar codeor otherwise. Alternatively, the transaction modification may bedictated by discounting information received from the host system. Thetransaction modification may take a variety of different forms, examplesof which include a uniform reduction in transaction cost by apredetermined percentage or through a full-cost deduction of at leastone item comprised by the transaction.

[0008] In a second set of embodiments, a method is provided to apply adiscount to a transaction. Information relating to a discountarrangement is extracted from a discount instrument at a point of sale.The transaction is modified in accordance with the discount arrangementand information relating to the discount arrangement is updated on thediscount instrument. In one such embodiment, the information relating tothe discount arrangement is extracted from a chip on the discountinstrument. In another embodiment, the information relating to thediscount arrangement is updated by writing information onto the chip.The transaction may be modified by applying a uniform cost reduction bya predetermined percentage or through a full-cost deduction of at leastone item comprised by the transaction.

[0009] The above methods may be implemented with a point-of-sale devicehaving a housing with a display screen, a data-entry device, a memory, acommunications device, and a processor coupled with the data-entrydevice, the memory, and the communications device. Such a point-of-saledevice may be configured to perform the methods described above.

[0010] In a third set of embodiments, a method is provided for managinga discount arrangement. Information relating to the discount arrangementis maintained. An identifier for a discount instrument presented duringa transaction is received from a point of sale, and a determination ismade whether the identifier identifies an active discount instrument. Ifso, information for the discount arrangement is transmitted back to thepoint of sale to identify the discount instrument as an active discountinstrument. The discount arrangement may define a variety of differenttransaction modifications, examples of which include a uniform reductionin transaction cost by a predetermined percentage or a full-costdeduction of at least one item comprised by the transaction. In someembodiments, the information relating to the discount arrangement mayalso be updated.

[0011] In some embodiments, the methods may include provisions toaccommodate nonparticipating merchants. In these embodiments, a methodis provided for implementing a program of discount arrangements.Discount-arrangement information relating to a plurality of discountarrangements is maintained, with each such discount arrangement beingassociated with one of a plurality of merchants. Transaction informationrelated to a transaction at a point of sale is received, with thetransaction information identifying a merchant party to the transaction.An identifier for a discount instrument presented at the point of saleduring the transaction is received. A determination is made whether themerchant party is one of the plurality of merchants is made. Validationinformation is then returned to the point of sale in accordance with thedetermination.

[0012] The validation information may comprise an indication that themerchant party is not one of the plurality of merchants. In instanceswhere the merchant party is one of the plurality of merchants, thevalidation information may comprise an instruction to apply a discountin accordance with the discount-arrangement information associated withthe merchant party. In some instances where the merchant party is notone of the plurality of merchants, the validation information comprisesan indication that no discount is to be provided to the transaction. Inother instances where the merchant party is not one of the plurality ofmerchants, a record may be generated for recording transactioninformation related to the merchant party. Where such a record alreadyexists, the method may comprise recording at least a portion of thetransaction information in the record. Criteria may be identified fromthe record for initiation of marketing efforts with the merchant party.More generally, at least a portion of the transaction information may berecorded in a database. The information in the database may be analyzedaccording to specified criteria, and a summary report may be generatedfrom the analyzed information. In some instances, the criteria may havebeen specified by the merchant party.

[0013] These methods may be embodied in a computer-readable storagemedium having a computer-readable program embodied therein for directingoperation of a computer system. Such a computer system may include aprocessor, a storage device, and a communications system. Thecomputer-readable program includes instructions for operating thecomputer system to manage a discount arrangement in accordance with theembodiments described above.

BRIEF DESCRIPTION OF THE DRAWINGS

[0014] A further understanding of the nature and advantages of thepresent invention may be realized by reference to the remaining portionsof the specification and the drawings wherein like reference numeralsare used throughout the several drawings to refer to similar components.In some instances, a sublabel is associated with a reference numeral andfollows a hyphen to denote one of multiple similar components. Whenreference is made to a reference numeral without specification to anexisting sublabel, it is intended to refer to all such multiple similarcomponents.

[0015]FIG. 1A is a block-diagram representation of an arrangement forimplementing a discounting program in accordance with an embodiment ofthe invention;

[0016]FIG. 1B is a schematic diagram of a point-of-sale device that maybe used with embodiments of the invention;

[0017]FIG. 1C is a schematic representation of an embodiment of adiscounting process using the arrangement shown in FIG. 1A in thecontext of fundraising activity;

[0018]FIG. 2A is a flow diagram of an embodiment of the discountingprocess that corresponds generally to the representation of FIG. 1B;

[0019]FIG. 2B is a flow diagram of an embodiment of the invention thattracks information related to nonparticipating merchants;

[0020]FIG. 2C is a flow diagram of an embodiment of the invention thatprovides reporting functions; and

[0021]FIG. 3 is a schematic illustration of a computer system on whichmethods of the invention may be embodied.

DETAILED DESCRIPTION OF THE INVENTION

[0022] Embodiments of the invention provide discount-instrument methodsand systems, including usage validation and tracking capabilities. Insome of the discussion that follows, examples of the use of suchdiscount instruments is provided, for illustrative purposes, in thecontext of fundraising programs. It will be appreciated, however, thatthe invention is not limited to fundraising applications and appliesmore generally to discount instruments regardless of how they may beobtained by customers. In some embodiments, the discount instrument maytake the form of a plastic card similar in structure to a credit card ordebit card. In fundraising applications, this card may be sold byindividuals of a fundraising organization to customers, who may then usethe card to obtain discounts on purchases of goods and/or services atone or more merchants. The card provides the customers with benefits inaccordance with a specific discount arrangement, although this discountarrangement may vary among cards. As used herein, the term “discountarrangement” is intended to be construed broadly as any arrangement thatprovides for a modification of a transaction that benefits a customer.Examples of discount arrangements include provisions that uniformlyreduce the cost of transactions either by a percentage amount orpredetermined fixed amount, provide “buy one, get one free” or “buy one,get the second at half price” arrangements, and the like. In addition,the benefit provided at each merchant may differ, with one providing a5% discount, for example, and another providing a free product (such asa free order of popcorn at a movie theater).

[0023] One structure that may be used to enable such embodiments isshown schematically with a block diagram in FIG. 1A. In this figure, thegeneral operation of a fundraising system is coordinated with a hostsystem 110. The host system 110 is controlled by a coordination entity112 that may be responsible for different functions in differentembodiments. In a simple embodiment, the host system 110 acts only tocoordinate whether the status of individual discount instruments isactive or inactive, but in other embodiments it performs furtherfunctions, such as tracking and reporting usage information. The hostsystem 110 may additionally maintain information related to theimplementation of the system on a database 114 and may use thatinformation to provide discount instructions to a merchant 122 inaccordance with the system when a customer 126 presents one of thediscount instruments. The host system 110 may also be equipped to modifythe implementation information as dictated by a merchant.

[0024] Interaction between the host system 110 and the merchant 122 andcustomer 126 may be effected with a point-of-sale device 118 at alocation of the merchant. Generally, the point-of-sale device 118 isequipped to read information from one of the discount instruments and totransmit that information to the host system 110. The host system 110may then provide a response to the point-of-sale device 118 with avalidation or denial of the request. Thus, in an embodiment where thediscount instrument comprises a plastic card with a magnetic strip, thepoint-of-sale device 118 may include a magnetic-strip reader. In otherembodiments, the discount instrument may include other features, such asmagnetic ink, a bar code, optical indicia, or the like, that thepoint-of-sale device 118 is equipped to read with magnetic-ink readers,bar-code readers, optical readers, or similar reading devices. In someembodiments, the point-of-sale device 118 may also be equipped toexchange information with a financial institution to coordinate paymentby the customer 126 for an associated transaction, such as when thecustomer pays for the transaction with a credit card, debit card, check,or other instrument. Examples of point-of-sale devices that includemultiple capabilities for extracting information from such transactioninstruments and/or discount instruments are provided in the followingcommonly assigned applications, the entire disclosures of which areincorporated herein by reference for all purposes: U.S. Prov. Pat. Appl.No. 60/147,889, entitled “INTEGRATED POINT OF SALE DEVICE,” filed Aug.9, 1999 by Randy J. Templeton et al.; U.S. patent application Ser. No.09/634,901, entitled “POINT OF SALE PAYMENT SYSTEM,” filed Aug. 9, 2000by Randy J. Templeton et al.; U.S. patent application Ser. No.10/116,689, entitled “SYSTEMS AND METHODS FOR PERFORMING TRANSACTIONS ATA POINT-OF-SALE,” filed Apr. 3, 2002 by Earney Stoutenburg et al.; U.S.patent application Ser. No. 10/116,733, entitled “SYSTEMS AND METHODSFOR DEPLOYING A POINT-OF-SALE SYSTEM,” filed Apr. 3, 2002 by EarneyStoutenburg et al.; U.S. patent application Ser. No. 10/116,686,entitled “SYSTEMS AND METHODS FOR UTILIZING A POINT-OF-SALE SYSTEM,”filed Apr. 3, 2002 by Earney Stoutenburg et al.; and U.S. patentapplication Ser. No. 10/116,735, entitled “SYSTEMS AND METHODS FORCONFIGURING A POINT-OF-SALE SYSTEM,” filed Apr. 3, 2002 by EarneyStoutenburg.

[0025] One specific example of how the point-of-sale device 118 may beconstructed is illustrated in FIG. 1B. The point-of-sale device 118comprises a housing 156 having a keypad 158 for entering various typesof information. The keys of the keypad 158 may permit the entry ofnumbers or letters, or may be function keys for performing variousfunctions. The point-of-sale device 118 further includes a displayscreen 160 for displaying information relating to a transaction and/orto a discount. A card reader 162 may also be provided for readinginformation from cards. The point-of-sale device 118 may communicatewith the host system 110 using any of a wide variety of communicationssystems, such as by a phone network, a wide-area network such as theInternet, a local-area network, a wireless network, and the like.

[0026] In addition to these structural elements of the system, FIG. 1Aillustrates how the system may be used in fundraising applications byadditionally showing the fundraising organization 102 and individualparticipant fundraisers 106. The interaction of fundraising organization102 and the individual fundraisers with the host system 110, merchants122, and customers 126 is indicated through the use of dotted lines inthe diagram.

[0027]FIGS. 1C and 2A depict the implementation of a typical fundraisingtransaction that uses the arrangement shown in FIG. 1A. FIG. 1Cschematically shows the flow of interactions between differentcomponents of the structure while FIG. 2A provides a flow diagram thatdetails a specific implementation in an embodiment. The steps shown inFIG. 2A are divided into two columns. The left column shows an exampleof how customers may acquire discount instruments as part of afundraising program and the right column shows an example of how acustomer with an authenticated discount instrument may use it to obtaindiscounts. The steps shown in the right column may thus be used toobtain discounts even if the discount instrument is acquired by thecustomer in a manner other than as part of a fundraising program. Thesolid-line arrows in FIG. 1C correspond to the blocks in the flowdiagram of FIG. 2A. The following description of an exemplarytransaction thus makes reference to both FIGS. 1C and 2A simultaneously.

[0028] As indicated at block 204, the initiation of a fundraisingprogram according to an embodiment of the invention begins withestablishing an arrangement between the fundraising organization 102 andthe coordination entity 112 and/or one or more merchants 122. Such anarrangement is an example of a discount arrangement that specifies theconditions under which the discount program may operate: which merchantsare to participate, what discount benefits those merchants are toprovide, what time limits may apply, etc. In some instances, thecoordination entity 112 may have one or more preconfigured arrangementsfrom which the fundraising organization 102 selects. After determiningwhat discount arrangement is to be used, further participation by thefundraising organization 102 may be as simple as selling discountinstruments to customers for a price in accordance with the discountarrangement. A portion of the price for each discount instrument isretained by the fundraising organization 102 and the remainder isretained by the coordination entity 112.

[0029] Thus, at block 208, the coordination entity 112 provides aplurality of discount instruments to the fundraising organization 102for it to sell. In some embodiments, the discount instruments maycomprise cards with magnetic strips, although the use of other forms forthe discount instruments is also within the scope of the invention. Insome embodiments the discount instruments are inactive when they areprovided at block 208, thereby preventing their fraudulent use shouldany of them be lost or stolen, although in other embodiments they may beactive. In one embodiment, the discount instruments are ensured to beinactivate by assigning a unique identifier to each discount instrumentand designating it as inactive in the database 114. In some embodiments,the unique identifier may correspond to an account number. The primaryactivity of the fundraising organization 102 is carried out at block 216as individual fundraisers 106 sell the discount instruments to customers126. Such sales may be made in any suitable fashion, including throughdoor-to-door solicitation, mail-order sales, sales at shopping malls,etc.

[0030] After the discount instruments have been sold to customers 126,the individual fundraisers 106 notify the fundraising organization 102at block 220 of which discount instruments have been sold and requireactivation, if applicable. This information may be accumulated frommultiple individual fundraisers 106 so that the fundraising organizationconveys a summary of the information to the coordination entity 112 atblock 224. This may be done in a variety of different ways. In oneembodiment, the host system 110 includes an interface for connectionwith the Internet, which is then used by the fundraising organization toidentify which of the discount instruments should be activated. In otherembodiments, a telephone interface may alternatively use dual-tonemultiple-frequency (“DTMF”) tones to convey the information. In stillother embodiments, the information may be conveyed to a representativeof the coordination entity 112 who enters it into the host system 110.Regardless of how the information identifying which cards have been soldis provided to the host system 110, the host system 110 activates therespective discount instruments at block 228. Such activation may beachieved by removing the “inactive” designation for each of the discountinstruments in the database 114, for example.

[0031] After each of the steps shown in the left column of FIG. 2A, eachcustomer 126 who has purchased one of the discount instruments may nowuse it in conjunction with transactions as set forth in the discountarrangement. In one embodiment, for example, the discount arrangementmay provide that customers receive a discount on all items purchasedfrom a particular merchant 122. Thus, at block 232 the customer 126makes a purchase of goods and/or services at one of the participatingmerchants 122. As part of the transaction, the customer 126 provides thediscount instrument so that it may be swiped at the point-of-sale device118 at block 236. The point-of-sale device 118 reads identificationinformation from the discount instrument, such as by reading anidentifier from a magnetic strip. This identification information isconveyed to the host system 110 at block 240 so that the host system 110may verify the validity of the discount instrument and retrieveactivation information at block 244. A validation is returned to thepoint-of-sale device at block 248 so that the appropriate discount maybe applied.

[0032] Actual application of the discount may be performed differentlyin different embodiments, depending on the configuration of the hostsystem 110. For example, in one embodiment, the identification providedby the point-of-sale device 118 to the host system 110 at block 240 maybe in the form of an authorization, a specific form of which is abalance-inquiry function, with the validation returned at block 248indicating only that the discount instrument has been activated. In suchan instance, the merchant may collect specific discounting informationfrom the discount instrument itself to apply the discount. Theinformation may be printed on the discount instrument so that themerchant keys the discount into the point-of-sale device 118.Alternatively, the information may be encoded on the discountinstrument, such as in the form of a bar code, that may be read with thepoint-of-sale device 118.

[0033] In other embodiments, details of the discount arrangement may bestored in the database 114 connected with the host system 110. In suchinstances, the validation information returned to the point-of-saledevice 118 at block 248 may include not only an indication that thediscount instrument has been activated, but also the applicable discountfor that instrument. In such an embodiment, the point-of-sale device 118may then apply the discount automatically without further action on thepart of the merchant. For example, if the discount arrangement indicatesthat the merchant is to offer a 5% discount on all merchandise, thepoint-of-sale device 118 may apply that discount automatically. If,instead, the discount arrangement indicates that a certain productshould be provided free of charge, the point-of-sale device 118 mayreduce the total cost of the transaction by the cost of that product.

[0034] In instances where such detailed information regarding thediscount arrangement is stored at the database 114, it may beappropriate for the information to be updated in response to thetransaction. Thus, in such instances, the host system 110 updates thedatabase 114 in accordance with the use of the discount instrument atblock 252. For example, if the fundraising arrangement provides for a 5%discount at a particular merchant only three times, the database 114 isupdated to record that an additional one of those times has been used;if the customer 126 attempts to use the discount instrument a fourthtime, the host system 110 will not instruct the point-of-sale device 118to apply the discount. Similarly, if the fundraising arrangementprovides for a free product only once, the database 114 is updated torecord that that portion of the fundraising arrangement has beensatisfied and that the product should not be provided free in thefuture. The updating may also record information about the use of thediscount instrument. Such information may be used in evaluating thepopularity of different components of fundraising arrangements toimprove offerings in the future. Such evaluations may themselves beperformed with broad or narrow demographic limitations, providing thecoordination entity 112 and/or the merchants 122 with useful marketinginformation.

[0035] There are other techniques that may alternatively be used foractivating discount instruments in other embodiments. For example, theactivation could be performed the first time the customer uses thediscount instrument rather than activating it in advance. It is alsopossible for the discount instrument to be activated before it is eversold to a customer. In some instances, the activation is performed as abatch activation of a plurality of cards at one time.

[0036] In some embodiments, methods of invention provide for identifyingand responding to merchants that do not participate in the program ofdiscount arrangements. For example, a customer who has purchased one ofthe discount instruments may present it at a variety of merchants withthe hope that they participate, even though some of them may not. FIG.2B thus uses a flow diagram to provide an illustration of how methodsfor accommodating nonparticipating merchants may be integrated with themethod illustrated in FIG. 2A in some embodiments. After the host system110 has retrieved activation information for the discount instrument atblock 244 of FIG. 2A, a check may be performed at block 256 whether themerchant identified with the point-of-sale device 118 is a participatingmerchant. If so, the method continues as previously described at block248 of FIG. 2A.

[0037] If, however, the merchant is identified as a nonparticipatingmerchant, records may be maintained for the number of times customersattempt to use the discount instruments with that merchant, when theyattempt to use them (by day of week, time of day, or other criteria),the types and dollar-amounts of transactions, their locations, etc.Accordingly, a check is made at block 260 whether any record has alreadybeen established for the identified nonparticipating merchant. If not,such a record is established at block 262 for use when the same merchantis subsequently identified. At block 264, relevant transactioninformation is added to the record for that merchant. It is generallydesirable to record as much information as possible from the transactioninformation to leave open as much versatility as possible for use of theinformation. In some instances, however, it may be appropriate to recordonly portions of the information where its uses are well known inadvance, such as through past experience in use of the information. Atblock 268, the host system 110 returns nonvalidation information back tothe point-of-sale device 118 so that the customer may be informed thatthe merchant does not participate at block 272.

[0038] Notification of the merchant's nonparticipation may well causethe customer to develop a negative impression of the merchant, at leastto the extent that the customer may be inclined to patronize merchantsfrom whom a discount may be obtained with the discount instrument. Overtime, the collection of information by the host system 110 may thus beused to identify possible merchant candidates for marketing efforts.These marketing efforts may use the collected information to demonstrateto the merchant statistical information on numbers of customers whowould like to use the instruments, the size of transactions implicated,temporal and geographic distributions of such attempts, and the like. Asindicated at block 276, in some instances the host system 110 itself maybe configured to identify specific criteria that have been satisfied toprompt initiation of such marketing efforts. Such criteria may includethreshold numbers of customers presenting the instruments at thenonparticipating merchant, threshold transaction values, separatethreshold values in localized geographic locations or localized timeperiods, and other correlations. In this way, embodiments of theinvention contemplate mechanisms for increasing the value of the programof discount arrangements by increasing the pool of participatingmerchants.

[0039] In other embodiments, the host system 110 may make similar use ofinformation collected from transactions that involve participatingmerchants. One such embodiment is illustrated in FIG. 2C, in which thehost system 110 systematically adds transaction information to adatabase at block 284. While the value of stored transaction informationis generally greater when it is more complete, in some instances it maybe collected selectively. For example, in some embodiments, alltransaction information that is received by the host system 110, whetherfrom a participating or nonparticipating merchant, is collected. Inother embodiments, only transaction information received from aparticipating merchant is collected. In still other embodiments, onlytransaction information meeting certain specified criteria, based onsuch factors as transaction size, time, location, and the like, iscollected.

[0040] The collected information is periodically analyzed according tospecified criteria, as indicated at block 288. Such analysis is intendedto digest the large volume of accumulated information using recognizedstatistical techniques to permit actual behaviors and trends to beidentified. A summary of such information may be presented in the formof a summary report for distribution to relevant parties. For example, asummary report limited to information about a particular merchant may bedistributed to that merchant. This allows the merchant to evaluate theeffectiveness of its participation in the program and perhaps to modifythe types of discount arrangements it wishes to offer. To facilitatesuch evaluations, the analysis performed at block 288 and the summaryreport generated at block 292 may be performed according to criteriaspecified in advance by the merchant. A summary report may also bedistributed to the coordination entity 112 to allow it to evaluate theeffectiveness of the program as a whole. Such an evaluation may suggestchanges to improve the program in terms of the types of discountsoffered, the types of merchants included, and the like.

[0041]FIG. 3 provides a schematic illustration of a structure that maybe used to implement the host system 110. Other structures that may beused are, for example, structures provided by IPS Card Solutions d/b/aValueLink. FIG. 3 broadly illustrates how individual system elements maybe implemented in a separated or more integrated manner. The host systemis shown comprised of hardware elements that are electrically coupledvia bus 326, including a processor 302, an input device 304, an outputdevice 306, the database 114, a computer-readable storage media reader310 a, a communications system 314, a processing acceleration unit 316such as a DSP or special-purpose processor, and a memory 318. Thecomputer-readable storage media reader 310 a is further connected to acomputer-readable storage medium 310 b, the combination comprehensivelyrepresenting remote, local, fixed, and/or removable storage devices plusstorage media for temporarily and/or more permanently containingcomputer-readable information. The communications system 314 maycomprise a wired, wireless, modem, and/or other type of interfacingconnection and permits data to be exchanged with the Internet, DTMFprocessor, cable processor, and/or point-of-sale devices 118 asdescribed in connection with FIGS. 1A-2C.

[0042] The host system 110 also comprises software elements, shown asbeing currently located within working memory 320, including anoperating system 324 and other code 322, such as a program designed toimplement methods of the invention. It will be apparent to those skilledin the art that substantial variations may be made in accordance withspecific requirements. For example, customized hardware might also beused and/or particular elements might be implemented in hardware,software (including portable software, such as applets), or both.Further, connection to other computing devices such as networkinput/output devices may be employed.

[0043] In another set of embodiments, the use of a host system may beavoided. For example, the discount instrument may comprise a chip card(sometimes referred to as a “smart” card) that includes a chip on whichinformation may be stored and retrieved. In such an embodiment, the chipacts as a surrogate for the host system, retaining information regardingthe activation of the discount instrument and possibly also specificinformation regarding the applicable discount arrangement. Thisinformation may or may not be subject to updating depending on thenature of the discount arrangement. The chip card may be used in muchthe same way as described above, with the information being extractedand/or modified with a chip-card reader/writer comprised by thepoint-of-sale device 118. The operation of the point-of-sale device 118is similar to that described previously except that it functions inresponse to information extracted only from the discount instrumentrather than also in response to information received from the hostsystem.

[0044] Exemplary Discount Arrangements

[0045] The systems and methods described above permit the implementationof a number of different types of discount arrangements. The followingtwo examples of a “discount card” arrangement and a “coupon card”arrangement are intended merely as illustrations. Other arrangementswill be evident to those of skill in the art after reading thisdescription.

[0046] In one embodiment, the discount arrangement provides discountcards, which may, for example, be sold by a fundraising organization102. The cost of the discount cards charged to customers is $10, ofwhich $5 is retained by the fundraising organization 102 and $5 isretained by the coordination entity 112. The discount cards provide fora 5% discount on merchandise purchased at Merchant A and a 10% discounton merchandise at Merchant B. These merchants have previously agreed toparticipate in the arrangement with the coordination entity 112 becauseof the enhanced visibility that their participation provides. In thisexample, the discount cards are limited in time by a year (or other settime period) to encourage annual repurchases by customers duringsubsequent fundraising drives. After customers purchase the discountcards from individual fundraisers and the cards are validated, they mayuse them as described above to receive discounts at Merchants A and B.In an embodiment where only an authorization is performed by themerchant to ensure that the discount card has been activated, thespecific discount information may be encoded in two bar codes that areincluded on the card in addition to the magnetic stripe—one of the barcodes encodes the discount for Merchant A and the other bar code encodesthe discount for Merchant B. Alternatively, the actual discounts may beprinted on the card for each merchant. In an embodiment where the hostsystem maintains information regarding the discount arrangement, it mayreturn the appropriate discount rate to the point-of-sale device as partof the verification function.

[0047] In another embodiment, a discount arrangement provides couponcards, which may be sold by a fundraising organization 102. The cost ofthe coupon cards charged to customers is $10, of which $5 is retained bythe fundraising organization 102 and $5 is retained by the coordinationentity 112. The coupon cards provide for a wide range of one-timediscounts off specifically identified products purchased at anymerchant. The cards may be advertised to the customers as having, say, atotal value of $125 worth of coupons. After customers purchase thecoupon cards from individual fundraisers and the cards are validated,they may use them as described above to redeem each of the one-timediscounts at any merchant that has a point-of-sale device capable ofcommunication with the host system 110. In one embodiment, thelimitation that the cards be used for one-time discounts is enforced byhaving the host system 110 manage the discount arrangement and updaterecords on the database 114 each time the card is used.

[0048] For each of these embodiments, the usage of the cards may becollected as authorizations are provided by the host system 110 fortheir use. This usage information may include a record of the use ofeach card at each merchant, with an indication of the date, time, andspecific store at which it was used. Software maintained by the hostsystem may perform analytical functions to summarize the information toprovide it to the merchants or may provide raw data to merchants forthem to perform their own analytical functions. In this way, merchantsparticipating in the program may receive information valuable in theanalysis of their business practices.

[0049] Thus, having described several embodiments, it will be recognizedby those of skill in the art that various modifications, alternativeconstructions, and equivalents may be used without departing from thespirit of the invention. Accordingly, the above description should notbe taken as limiting the scope of the invention, which is defined in thefollowing claims.

What is claimed is:
 1. A method for implementing a program of discountarrangements, the method comprising: maintaining discount-arrangementinformation relating to a plurality of discount arrangements, whereineach such discount arrangement is associated with one of a plurality ofmerchants; receiving transaction information related to a transaction ata point of sale, the transaction information identifying a merchantparty to the transaction; receiving an identifier for a discountinstrument presented at the point of sale during the transaction; makinga determination whether the merchant party is one of the plurality ofmerchants; and returning validation information to the point of sale inaccordance with the determination.
 2. The method recited in claim 1wherein the validation information comprises an indication that themerchant party is not one of the plurality of merchants.
 3. The methodrecited in claim 1 wherein: the merchant party is not one of theplurality of merchants; and the validation information comprises anindication that no discount is to be provided to the transaction.
 4. Themethod recited in claim 1 wherein: the merchant party is one of theplurality of merchants; and the validation information comprises aninstruction to apply a discount in accordance with thediscount-arrangement information associated with the merchant party. 5.The method recited in claim 1 wherein the merchant party is not one ofthe plurality of merchants, the method further comprising generating arecord for recording transaction information related to the merchantparty.
 6. The method recited in claim 1 wherein the merchant party isnot one of the plurality of merchants, the method further comprisingrecording at least a portion of the transaction information in a recordassociated with the merchant party.
 7. The method recited in claim 6further comprising identifying criteria from the record associated withthe merchant party for initiation of marketing efforts with the merchantparty.
 8. The method recited in claim 1 further comprising recording atleast a portion of the transaction information in a database.
 9. Themethod recited in claim 8 further comprising: analyzing information inthe database according to specified criteria; and generating a summaryreport from the analyzed information.
 10. The method recited in claim 9further comprising distributing the summary report to the merchantparty.
 11. The method recited in claim 9 wherein the criteria arespecified by the merchant party.
 12. A computer system comprising: astorage device; a communications device; a processor in communicationwith the storage device and the communications device; and a memorycoupled with the processor, the memory comprising a computer-readablestorage medium having a computer-readable program embodied therein foroperating the computer system to manage a discount arrangement, thecomputer readable program including: instructions for maintaining on thestorage device discount-arrangement information relating to a pluralityof discount arrangements, wherein each such discount arrangement isassociated with one of a plurality of merchants; instructions forreceiving with the communications device transaction information relatedto a transaction at a point of sale, the transaction informationidentifying a merchant party to the transaction; instructions forreceiving with the communications device an identifier for a discountinstrument presented at the point of sale during the transaction;instructions for making a determination with the processor whether themerchant party is one of the plurality of merchants; and instructionsfor returning validation information to the point of sale with thecommunications device in accordance with the determination.
 13. Thecomputer system recited in claim 12 wherein the validation informationcomprises an indication that the merchant party is not one of theplurality of merchants.
 14. The computer system recited in claim 12wherein: the merchant party is not one of the plurality of merchants;and the validation information comprises an indication that no discountis to be provided to the transaction.
 15. The computer system recited inclaim 12 wherein: the merchant party is one of the plurality ofmerchants; and the validation information comprises an instruction toapply a discount in accordance with the discount-arrangement informationassociated with the merchant party.
 16. The computer system recited inclaim 12 wherein the merchant party is not one of the plurality ofmerchants, the computer-readable program further including instructionsfor generating a record for recording on the storage device transactioninformation related to the merchant party.
 17. The computer systemrecited in claim 12 wherein the merchant party is not one of theplurality of merchants, the computer-readable program further includinginstructions for recording on the storage device at least a portion ofthe transaction information in a record associated with the merchantparty.
 18. The computer system recited in claim 17 wherein thecomputer-readable program further includes instructions for identifyingcriteria from the record associated with the merchant party forinitiation of marketing efforts with the merchant party.
 19. Thecomputer system recited in claim 12 wherein the computer-readableprogram further includes instructions for recording at least a portionof the transaction information in a database.
 20. The computer systemrecited in claim 19 wherein the computer-readable program furtherincludes: instructions for analyzing with the processor information inthe database according to specified criteria; and instructions forgenerating with the processor a summary report from the analyzedinformation.
 21. The computer system recited in claim 20 wherein thecriteria are specified by the merchant party.